Tight grip on bottle

SABMiller is the second-largest shareholder (with a 29.1% stake) in Distell, behind industrial conglomerate Remgro, which holds a 33% stake via Capevin Investments and Capevin Holdings.

Having an aggressive competitor as a large shareholder clearly worries some minority shareholders, who want to know why there have been no efforts to place the Distell stake owned by SABMiller with investors - especially since the beer group has tagged the Distell stake as noncore.

Remgro would probably not think twice about fortifying its stake in Distell. But SABMiller has shown not the slightest intention of relinquishing its hold.

"We have been led up the garden path many times by advisers claiming to have a mandate for selling the SABMiller shares," says Remgro CEO Thys Visser, who serves on the boards of both Capevins. "But until SABMiller decides it does not want to hold its Distell shares there is nothing we can do."

Capevin chairman Chris Otto says the main shareholders in Distell have preemptive rights on each other's shareholdings. This clouds the matter, as do arguments that a change of control in Distell might trigger challenges to a variety of valuable trademark agreements.

It appears that the cumbersome Capevin structures will remain for the foreseeable future, unless SABMiller has a sudden change of mind on a stake that represents around 1% of its market capitalisation.

Currently Capevin Investments offers a discount of more than 15% on Distell, while Capevin Holdings trades at a hefty 30% discount to its ultimate holding in Distell.

It's frustrating for minorities who are keen to unlock value. But the Capevins remain attractive entry points to one of SA's best-run liquor companies, even if the current ownership structure may be holding back Distell's potential as a global player.

Source: Financial Mail